We are developing the social individualist meta-context for the future. From the very serious to the extremely frivolous... lets see what is on the mind of the Samizdata people.
Samizdata, derived from Samizdat /n. - a system of clandestine publication of banned literature in the USSR [Russ.,= self-publishing house]
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The idea of the Enemy Class, to coin Sean Gabb’s term, gains credibility by the hour. A distinguished member of this class is Lord (but of course!) Adair Turner, now chairman of the Financial Services Authority, the regulator of UK financial affairs. The FSA was set up by the current Labour administration in 1997, and among its many achievements is to have largely failed to warn of the catastrophic expansion of credit – driven by central banks – which created an asset bubble in the UK. It failed to warn sufficiently about the high-risk lending policies of mortgage lender Northern Rock. Undaunted, the FSA churns out reams of consultations and reviews on how to make financial services more efficient and professional. It would require the patience of a saint to point out that the best way to promote competitive, high-quality financial services is for regulators and other agents of the State to get out of the bloody way and ensure that firms have to build a solid reputation and for consumers to exercise the virtue of caveat emptor.
But the latest foray of the FSA into the issues surrounding the credit crunch may be its lowest point yet. Lord Turner argues that the UK banking sector is too large, so large in fact, that it is harmful to society. He does not, in the widely cited Prospect magazine interview, elucidate what he means by “too large”, or whether it is possible for a civil servant, economist or other such person to figure out the optimum size of a specific sector. When Hayek talked of the “fatal conceit” of socialists imagining they can micro-manage the balance of human activities, this is the sort of hubristic thinking the great man was talking about.
I fear Lord Turner is also missing a crucial point, or just ignoring it. The point is that in a globalized economy such as we now have, financial centres such as London, Singapore, Zurich and New York are almost akin to nations in their own right; they dwarf the economies of their host nations because specialisation in finance has moved to a global arena. They rather resemble the old north European Hanseatic League of the Middle Ages. Take a different sector, such as telecoms. Finnish mobile phone firm Nokia is so large, as a percentage of Finnish GDP that a Finnish equivalent of Lord Turner would no doubt argue that the company should be punitively taxed, so that it shrinks and gives the reindeer industry in Lapland a greater share of GDP, or help those vodka retailers do so, or whatever. It is easy to laugh at such bizarre logic, but remember this: these guys have got where they are not by baldly stating their views in quite such terms, but by insinuating them through such question-begging terms as “excessively large”, or by referring to a sector of an economy as “swollen”.
Now it is true that as long as big banks can exert a sort of moral blackmail over taxpayers by stating that they are “too big to fail”, and as long as we benighted taxpayers are told we have to bail these guys out, then Lord Turner’s odd logic will gain a kind of ready audience. But he is looking at the problem the wrong way round: instead of making banking smaller and less profitable and simply driving it abroad, the better approach is to remove state-mandated deposit protection; to remove arbitrary and often counter-productive capital requirements and above all, to focus on the prime culprit in this business: the central bank as printer of funny money. But to do that will require the sort of analysis that does not give the FSA, or other bodies, the powers to tax and regulate. The FSA, like all regulators, is forever looking to increase its powers; it is hardly likely to consider the problem in such a way as to make itself redundant.
Perhaps we’ll soon be hearing that the casino sector is “excessive” in Las Vegas, gold mining is a “swollen” part of the South African economy, and there is too much reliance on fishing in Norway. And as for those Arabs, they spend far too much of their time drilling for oil. Cannot those chappies do something less fwightfully vulgar?
Lord Turner, by the way, is a former director general of the Confederation of British Industry, a lobby group for big business; he has had a consultancy role for Merrill Lynch and has wiritten a long and quasi-statist paper on UK pensions reform. He’s Enemy Class to the core. That he is, as I can attest, a thoroughly likeable guy does not alter that fact. It makes him actually quite dangerous.
Update: Tim Worstall points out how opposed to the notion of economic liberty this man actually is. When someone says that “an activity is socially useless”, what he or she really means is that “I don’t understand the use for it so it should be banned”.
I picked up the following two items from a Janes newsletter and thought they might be of interest:
US military airborne laser passes first in-flight engagement The US military’s airborne laser (ABL) successfully completed its first in-flight test against an instrumented target missile on 10 August, the prime contractor Boeing said in a statement on 13 August. The US Missile Defense Agency (MDA) is testing the viability of using the high-powered laser to destroy enemy missiles in the boost phase.
Standard Missile 3 Block IB cleared to begin flight tests The Standard Missile 3 (SM-3) Block IB programme to develop an improved missile for the US Missile Defense Agency’s sea-based Aegis Ballistic Missile Defense System has completed its critical design review, Raytheon announced on 13 July. The new missile is expected to begin flight tests in 2010. SM-3 Block IB offers significant improvements over the SM-3 Block IA version currently deployed on US Navy Aegis cruisers and destroyers and Japanese Maritime Self-Defense Force destroyers to defend against short- to intermediate-range ballistic missile threats in the ascent and midcourse phases of flight.
So things are still plodding along on all fronts and all becomes simpler as technology improves. I still believe the key number for missile interception is the figure of merit I wrote of a long time ago: instructions per meter. That is the number of machine code instructions that a CPU can process in the time it takes for the relative positions of the target and the interceptor (or laser station) changes by one meter. When this number gets large, the targeting system has more time to ponder what is going on and more time to analyze fused sensor data. Another way of looking at it is that time effectively runs more slowly for the targeting software as the number gets larger.
This is yet another side effect of Moore’s Law. Our processing capabilities are growing to the point where either very sophisticated predictive programs may be used… or very unsophisticated and unoptimized programs will become ‘good enough’.
The journalists who produce the UK’s Channel 4 news programme produced a rather sly piece of leftist propoganda last night (Quelle surprise? Ed). Faisal Islam – whom I have met – had a brief slot on last night’s daily broadcast suggesting that the Chicago school of economics, most famously associated with the likes of Milton Friedman, is somehow partly to blame for the credit crunch. Yes, you read that right.
Mr Islam went on about the “complex models” that were used by these economists and somehow sought to draw a link between the Chicago School, and the decisions taken by banks, both central and private. That seems a bit rum. I don’t recall Dr Friedman or his associates granting a sort of blanket blessing to financial engineering techniques of the kind associated with recent turmoil, suchas using derivatives to put bank liabilities off the balance sheet. That school has also hardly been in favour of encouraging sub-prime lending by legislation. After all, quite a lot of economists with conventional “soft Keyensian” views pretty much signed up to how banking has operated in the last few decades, and of course signed up to the idea that former Fed Chairman Alan Greenspan, and his successor, Ben Bernanke, did a spiffing job.
There was no apparent attempt – admittedly quite difficult in a short TV spot – to explain what the key arguments of the Chicago school of economics actually are. Nor was there any attempt to point out that this “school” is only one of the centres of free market economics. The Austrian viewpoint, which tends to eschew statistical formulae completely, went unmentioned. And yet it is the latter approach, as exemplified by the likes of Thomas Woods, that has been most active in pointing out the sheer folly of central bank activity in the past decade or so. And this central bank activity is what has been the prime culprit, a fact that Mr Islam’s documentary left unmentioned.
The programme also failed to ask any questions of the Keynesian tradition, with its love of big, artificial aggregates such as “consumer demand” etc. If one is going to point to the hubris of statistical models of economic behaviour, then the Keynesian macroeconomic tradition is surely as much in the firing line as the Chicago one.
As propoganda, it was very effective on anyone who might not understand the issues. It might have been put together by that performance artist, Naomi Klein.
Maybe the problem is that these issues are often highly complex and difficult to portray intelligently in a 5-minute news slot. Well indeed.
After having it sit on my book shelf collecting dust for half a decade or more, I finally picked up Karl Popper’s “The Open Society and It’s Enemies” as I had nothing left that was less daunting in appearance for my late afternoon lunch/dinner/coffee break. Whatever else I may get from it, whether I find myself agreeing or not, I most certainly found it a generator of ideas and flights of wild fancy, some of which I will now impose upon you.
First, I have only ever read parts of Plato. A few chapters here and there over the years. I have tended to use my deep thinking reading time for people more like Hayek and the other free market economists and thinkers. Thus I was utterly and totally unprepared for the shock of the Platonic quotation that headed Volume I:
The greatest principle of all is that nobody, whether male or female, should be without a leader. Nor should the mind of anybody be habituated to letting him do anything at all on his own initiative; neither out of zeal, nor even playfully. But in war and in the midst of peace — to his leader he shall direct his eye and follow him faithfully. And even in the smallest matter he should stand under leadership. For example, he should get up, or move, or wash, or take his meals… only if he has been told to do so. In a word, he should teach his soul, by long habit, never to dream of acting independently, and to become utterly incapable of it.”
I do not think I have ever had such a horrified awakening to such pure evil in my life. If this is what Plato’s philosophy espouses, then nearly anything built upon him is likely to be totalitarian and I can easily see the direct line from him through the Hitler’s and Stalin’s and Mao’s and Pol Pot’s of well over two thousand years after his demise.
ELSPA director general Mike Rawlinson said:
The discovery that the Video Recordings Act is not enforceable is obviously very surprising. In the interest of child safety it is essential that this loophole is closed as soon as possible.
In this respect the videogames industry will do all it can to support and assist the government to that effect. ELSPA will therefore advise our members to continue to forward games to be rated as per the current agreement while the legal issues are being resolved.
FFS!
Watch this outstanding commentary on political correctness in academia and the culture and naked lies in the media called MSNBC & The Great Liberal Narrative: The Truth About The Tyranny of Political Correctness.
And I know Bill and he is a really great guy, a true gentleman. But Bill… stop calling them liberal. We are the true liberals.
PJTV really is getting some truly great stuff up lately.
David Gordon, a US writer, has a good review of a book called, unambiguously, The Case for Big Government by Jeff Madrick.
I liked Gordon’s final paragraph, which is worth waiting for. Assuming his review is fairly based, it is amazing how lame, or downright thin, are the arguments for big government. It is a sort of backhanded compliment to the efforts of free marketeers that collectivists should still feel the need to write such works defending their views at all. Whenever we get grumpy and depressed about the way the world is going, it is good to remember that the other side cares enough about our views to want to try and deal with them, however shabbily.
Update: thanks to a reader for spotting my error in the name of the reviewer. My bad. Now fixed.
Michael Yon emails Instapundit, “The British Ministry of Defence cancelled my embed after today’s dispatch. Please read Bad Medicine.”
James Bowman on the latest work of Quentin Tarantino, a sort of cartoon treatment of WW2:
“It is important for us to remember that those known to history as Nazis were not cartoon characters. Nor were those who fought and finally defeated them. Nor was that defeat accomplished by a gang of bloodthirsty, free-lancing American Jews in search of revenge who manage to commandeer a ludicrously implausible scheme to assassinate the entire German high command, including Hitler and Goebbels, in a small Parisian cinema by setting fire to a pile of nitrate film. I know, I know. Mr. Tarantino’s are not real Nazis, any more than these are real historical events. But that doesn’t seem to me enough of an excuse for them when American schoolchildren — for whose eyes this film is principally intended — may scarcely be supposed to know what was real.”
I think I’ll give the movie a miss, having never cared for any of Tarantino’s output. A friend of mine once told me that he thought T’s films were brilliant, but wicked, morally empty. For balance, here is a slightly more favourable review by Roderick Long.
I came across this gem of a comment by an Obama supporter – assuming the commenter was sincere and not a troll, and it is just too good to go unremarked. The comment was made on a suitably acerbic column by Matt Welch, one of those Reasonoids who have gone very sour indeed on the US president.
Here is the comment:
“I´m american and not angry. i´m happy with our new president. vladimir putin likes him, too. looking forward to his next 3 years as president.”
Priceless.
“The fact that compensation would often not be forthcoming either because of inability to catch the offender or inability to pay if caught would motivate us to take out “crime insurance”, which in turn would motivate the insurance company to catch such criminals as it profitably could. Criminals would have plenty to fear from these highly motivated companies, who of course would acquire from their clients the right to such compensation as they could exact, at least up to the level of full resitution. It would be interesting to know whether the net effect would be more satisfactory than the current system, but when you consider the all-but-total failure of the punishment system actually employed in, say, the United States and Canada, it is difficult to believe that it wouldn’t be a major improvement. Everyone agrees that we have very far to go in the way of improving our system of responding to crime. It is a sobering thought that getting rid of one of the most spectacularly cost-effective systems in the history of mankind short of war is perhaps even less likely to be seriously considered than is abolition of war.”
Jan Narveson, The Libertarian Idea, pages 230-231.
If you are rich enough, you will be able to circumvent the prohibition and obtain the right to select the sex of your child. The Human Fertilisation and Embryological Authority bans the practice here, though their grounds are weak:
Britain’s Human Fertilisation and Embryology Authority remains cautious, citing public opposition to sex selection. “In the US there is no official regulator to monitor clinics and no legal obligation to offer the counselling that is an important part of treatment,” a spokesman said. “Those who choose to go overseas for their treatment should make themselves aware of the laws and consider what impact there may be on any child that is subsequently born.”
Public opposition is cited, alongside a nannyish presumption of in loco parentis. Public opposition is not a sufficient reason for curbing reproductive freedoms and gives a veto to lobbies who invoke the ‘yuck’ factor. The HFEA model of regulation never succeeded and medical practices should be allowed, except in cases of safety.
If Parliament wishes to outlaw a reproductive technology,then let it do so: otherwise, the presumption of freedom should prevail.
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Who Are We? The Samizdata people are a bunch of sinister and heavily armed globalist illuminati who seek to infect the entire world with the values of personal liberty and several property. Amongst our many crimes is a sense of humour and the intermittent use of British spelling.
We are also a varied group made up of social individualists, classical liberals, whigs, libertarians, extropians, futurists, ‘Porcupines’, Karl Popper fetishists, recovering neo-conservatives, crazed Ayn Rand worshipers, over-caffeinated Virginia Postrel devotees, witty Frédéric Bastiat wannabes, cypherpunks, minarchists, kritarchists and wild-eyed anarcho-capitalists from Britain, North America, Australia and Europe.
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